Please explain
(Click the icon to view the comparative variable costing income statement.) 076,000. (Click the icon to view the comparative absorption costing income statement.) Read the requirements.i Requirements X 1. Prepare income statements for 20X1 under variable costing and under absorption costing. 2. Explain why operating income was different under variable costing and absorption costing. Show your calculations.Variable-costing method - X 20X0 20X1 Sales, 13,600 and 15,600 computers, respectively 6,800,000 5 7,800,000 Variable expenses: Variable manufacturing cost of goods sold Opening inventory, at standard variable costs of $200 0 S 560,000 Add: variable cost of goods manufactured at standard, 16,400 and 13,600 computers, respectively 3,280,000 2,720,000 Available for sale, 16,400 computers in each year $ 3,280,000 3,280,000 Deduct: ending inventory, at standard variable cost of $200 560,000 # 160,000 * Variable manufacturing cost of goods sold $ 2,720,000 3,120,000 Variable selling expenses, at 5% of dollar sales 340,000 390,000 Total variable expenses 3,060,000 3,510,000 Contribution margin $ 3,740,000 $ 4,290,000 Fixed expenses: Fixed factory overhead $ 1,036,000 S 1,036,000 Fixed selling and administrative expenses 450,000 450,000 Total fixed expenses 1,486,000 1,486,000 Operating income, variable costing 2,254,000 $ 2,804,000 *2,800 computers at $200 = $560,000. **800 computers at $200 = $160,000 Print Doneo Absorptioncosting method - X 20:10 20341 Sales 5 0,300,000 $ 7,800,000 Cost of goods sold: Opening inventory, at standard absorption cost of $2?0* 5 0 $ ?56,000 Cost of goods manufactured at standard of $2?0 w M Available for sale 4,420,000 4,428,000 Deduct: ending inventory at standard absorption cost of $270 760,000 215-00\" Cost of goods sold, at standard w w Gross prot at standard 3,123,000 3,533,000 Productionvolume variance\" 112,000 F U Gross margin or gross prot, at"aclual" 3,240,000 3,504,000 Selling and administrative expenses ?90,000 8403\"\" Operating income 5 2,450,000 $ 2,004,000 *Uariaole cost 5 200 Fixed cost 151 030.0001 14,000} 10 Standard absorption cost \"Computation o1 productionvolume variance based an expected volume of production of 14,300 computers: 20x0 5 112,000 F (15,400 - 14,3001): $?0 20x1 0 (13,000 -14,0001x W0 5 23,000 Two years toge'dier F (30,000 29,600) )1 W0 U = Unfavorable, F = Favorable Requirement 1. Prepare income statements for 20X1 under variable costing and under absorption costing Begin by preparing the variable costing income statement. (Enter amounts in thousands of dollars.) Desk PC Division Income Statement (Variable Costing) For the Year 20X1 (in thousands of dollars) Sales Opening inventory, at variable standard costs of $200 Add: variable cost of goods manufactured Available for sale Deduct: ending inventory, at variable standard cost of $200 Variable cost of goods sold, at standard Net flexible-budget variances for all variable costs, unfavorable Variable cost of goods sold, at actual Variable selling expenses, at 5% of dollar sales Total variable costs charged against sales Contribution margin Fixed factory overhead Fixed selling and administrative expenses Total fixed expenses Operating income Enter any number in the edit fields and then click Check Answer. 2 parts remaining
